“The Bear Market Economics Phenomenon” is an observation of Political Economics. Wall Street Admits: ‘We Got Rich Off the Backs of Workers’ thus creating the Bear Market. The Bear Market is America's default war.
The ethic of Wall Street is the ethic of celebrity. It is fused into one bizarre, perverted belief system and it has banished the possibility of the country returning to a reality-based world or avoiding internal collapse. A society that cannot distinguish reality from illusion dies.

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Sunday, October 4, 2009

Why Only the Super Rich Should Be Taxed

Taxing income is absurd. We need to tax how it is used and whether the use is sustainable. Sustainability should be compensated with economic incentives. Income on wages paid for work is a barter and should not be taxed. The work is often more valuable to society than the compensation paid. ~Bear

A Millionaire with a Super Yacht Is a Larger Strain on Resources Than Hundreds of Peasant Families

It's time we had the guts to name the problem. It isn't population; it's consumption. It's not sex; it's money. It's not the poor; it's the rich.

It's no coincidence that most of those who are obsessed with population growth are post-reproductive wealthy white men: it's about the only environmental issue for which they can't be blamed. The brilliant earth systems scientist James Lovelock, for example, claimed last month that "those who fail to see that population growth and climate change are two sides of the same coin are either ignorant or hiding from the truth. These two huge environmental problems are inseparable and to discuss one while ignoring the other is irrational." But it's Lovelock who is being ignorant and irrational.

A paper published yesterday in the journal Environment and Urbanization shows that the places where population has been growing fastest are those in which carbon dioxide has been growing most slowly, and vice versa. Between 1980 and 2005, for example, Sub-Saharan Africa produced 18.5% of the world's population growth and just 2.4% of the growth in CO2. North America turned out 4% of the extra people, but 14% of the extra emissions. Sixty-three per cent of the world's population growth happened in places with very low emissions.

Even this does not capture it. The paper points out that around one sixth of the world's population is so poor that it produces no significant emissions at all. This is also the group whose growth rate is likely to be highest. Households in India earning less than 3,000 rupees a month use a fifth of the electricity per head and one seventh of the transport fuel of households earning Rs30,000 or more. Street sleepers use almost nothing. Those who live by processing waste (a large part of the urban underclass) often save more greenhouse gases than they produce.

Many of the emissions for which poorer countries are blamed should in fairness belong to us. Gas flaring by companies exporting oil from Nigeria, for example, has produced more greenhouse gases than all other sources in sub-Saharan Africa put together. Even deforestation in poor countries is driven mostly by commercial operations delivering timber, meat and animal feed to rich consumers. The rural poor do far less harm.

The paper's author, David Satterthwaite, points out that the old formula taught to all students of development -- that total impact equals population times affluence times technology (I=PAT) -- is wrong. Total impact should be measured as I=CAT: consumers times affluence times technology. Many of the world's people use so little that they wouldn't figure in this equation. They are the ones who have most children.

While there's a weak correlation between global warming and population growth, there's a strong correlation between global warming and wealth. I've been taking a look at a few superyachts, as I'll need somewhere to entertain Labour ministers in the style to which they're accustomed. First I went through the plans for Royal Falcon Fleet's RFF135, but when I discovered that it burns only 750 litres of fuel per hour I realised that it wasn't going to impress Lord Mandelson. I might raise half an eyebrow in Brighton with the Overmarine Mangusta 105, which sucks up 850 l/hr. But the raft that's really caught my eye is made by Wally Yachts in Monaco. The WallyPower 118 (which gives total wallies a sensation of power) consumes 3400 l/hr when travelling at 60 knots. That's nearly one litre per second. Another way of putting it is 31 litres per kilometre.

Of course to make a real splash I'll have to shell out on teak and mahogany fittings, carry a few jet skis and a mini-submarine, ferry my guests to the marina by private plane and helicopter, offer them bluefin tuna sushi and beluga caviar and drive the beast so fast that I mash up half the marine life of the Mediterranean. As the owner of one of these yachts I'll do more damage to the biosphere in ten minutes than most Africans inflict in a lifetime. Now we're burning, baby.

Someone I know who hangs out with the very rich tells me that in the banker belt of the lower Thames valley there are people who heat their outdoor swimming pools to bath temperature, all round the year. They like to lie in the pool on winter nights, looking up at the stars. The fuel costs them £3000 a month. One hundred thousand people living like these bankers would knacker our life support systems faster than 10 billion people living like the African peasantry. But at least the super wealthy have the good manners not to breed very much, so the rich old men who bang on about human reproduction leave them alone.

In May the Sunday Times carried an article headlined "Billionaire club in bid to curb overpopulation." It revealed that "some of America's leading billionaires have met secretly" to decide which good cause they should support. "A consensus emerged that they would back a strategy in which population growth would be tackled as a potentially disastrous environmental, social and industrial threat." The ultra-rich, in other words, have decided that it's the very poor who are trashing the planet. You grope for a metaphor, but it's impossible to satirise.

James Lovelock, like Sir David Attenborough and Jonathan Porritt, is a patron of the Optimum Population Trust (OPT). It is one of dozens of campaigns and charities whose sole purpose is to discourage people from breeding in the name of saving the biosphere. But I haven't been able to find any campaign whose sole purpose is to address the impacts of the very rich.

The obsessives could argue that the people breeding rapidly today might one day become richer. But as the super wealthy grab an ever greater share and resources begin to run dry, this, for most of the very poor, is a diminishing prospect. There are strong social reasons for helping people to manage their reproduction, but weak environmental reasons, except among wealthier populations.

The Optimum Population Trust glosses over the fact that the world is going through demographic transition: population growth rates are slowing down almost everywhere and the number of people is likely, according to a paper in Nature, to peak this century, probably at around 10 billion. Most of the growth will take place among those who consume almost nothing.

But no one anticipates a consumption transition. People breed less as they become richer, but they don't consume less; they consume more. As the habits of the super-rich show, there are no limits to human extravagance. Consumption can be expected to rise with economic growth until the biosphere hits the buffers. Anyone who understands this and still considers that population, not consumption, is the big issue is, in Lovelock's words, "hiding from the truth." It is the worst kind of paternalism, blaming the poor for the excesses of the rich.

So where are the movements protesting about the stinking rich destroying our living systems? Where is the direct action against superyachts and private jets? Where's Class War when you need it?

It's time we had the guts to name the problem. It's not sex; it's money. It's not the poor; it's the rich.

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“Bear Market Economics” is an expression of Political Economics, an interdisciplinary field focusing on the non-market, collective, and political activity of individuals and organizations. Specific fields of inquiry include regulation, distributive politics, elections, corporate politics, public policy, social welfare, scientific and science policy, political participation and collective action, interest groups, constitutional choice, legislative behavior and organization, judicial institutions, bureaucracies, comparative institutions, cooperative political economy, macro political economy, allocation of resources, the environment, ecology, law and economics, business and government, how markets affect and impact the public and the commons. The orientation to these topics tends to be positive rather than normative.

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Capitalism is preferentially identified by its euphemisms: "Free Enterprise," "market system," "private enterprise." "the American Way," etc. Overt and pervasive partisanship in support of capitalism is not regarded by the American media as an ideological bias negating professional "objectivity" but rather comparable to the serene acceptance of natural laws.